Lemonade & the Self-Driving Dream (or Delusion)

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January. Another month, another stock surge. Apparently, Lemonade (LMND 7.21%) had a good one – up 21.9%, if you believe the numbers. Which, honestly, I usually don’t, but let’s play along. It’s all about narrative, isn’t it? And the narrative this time is…cars. Specifically, Tesla cars. And the slightly terrifying idea of handing over control to a computer.

Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. (Mostly about the crypto, to be fair.) But I digress. Lemonade launched a new car insurance plan. A very specific car insurance plan. It rewards people for letting their Teslas drive themselves. It’s…ambitious. And possibly insane. But it got the stock moving, so who am I to judge?

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The Tesla Gambit

The stock had been on a bit of a tear for months, apparently. August and November earnings reports were good, which is always helpful. Loss ratios improved, gross earned premium went up – all the usual jargon. It was up 138.3% in 52 weeks. Honestly, it felt a little…unearned. Like a particularly enthusiastic puppy getting all the attention. But then came the Tesla plan, and suddenly everyone was very excited. It was up almost 10% before the plan even launched. The power of hype, I suppose.

The idea is simple enough. You let the car drive itself (Full Self-Driving, naturally), and Lemonade cuts your mileage fee in half. It’s…logical, in a way. Fewer accidents, presumably. Although, given the number of near-misses I’ve witnessed involving self-driving cars, I’m not entirely convinced. It’s a bit like betting on a robot to be a better driver than a human. Which, let’s face it, might not be that hard. But still. Risk.

Apparently, Shai Wininger, the Lemonade CEO, hinted at this back in October, tagging Elon Musk on X. (Previously Twitter, but who’s counting?). It didn’t do much at the time. Investors probably thought it was just one of those CEO-dreaming-out-loud moments. Like when I decide I’m going to become a disciplined long-term investor. It never happens.

The Fine Print (Because There Always Is)

Naturally, there are caveats. Lots of them. The coverage relies on a direct data feed from the Tesla cars. Which sounds…intrusive. And potentially hackable. It launched in Arizona on January 26th, with Oregon to follow “a month later.” Eight other states have Lemonade car insurance already, and they’ll be added “over time.” It’s a slow roll-out. Which is probably wise. But also…slightly deflating.

Long-term, Lemonade wants to expand this to other self-driving cars. But Tesla is the only one with enough data and a direct data link right now. Which feels a bit…monopolistic. And also reliant on the continued success of Tesla. Which, let’s be honest, is never a sure thing.

The big idea, of course, is that robo-cars will be safer. Fewer accidents, fewer claims, happier insurance companies. It’s a beautiful theory. But real-world data…well, that’s still out. It remains to be seen if it will actually pan out. But if it does, and if it spreads to other brands, it could be a turning point for Lemonade’s financials. Or it could be a very expensive gamble. Time will tell.

Days Spent Worrying About the Future of Autonomous Vehicles: 3. Number of Times I’ve Considered Just Walking Everywhere: 17. Current Level of Existential Dread: High.

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2026-02-03 07:02